Press Release

WASHINGTON, D.C. – Leading Congressional investigators on the House Oversight and Government Reform and House Financial Services Committees today released the following statements on the decision of the Securities and Exchange Commission (SEC) Inspector General to refer the matter of the ethics failure and conflict of interest involving former General Counsel David Becker to the Department of Justice:

“The Inspector General’s finding that Mr. Becker played a ‘significant and leading role’ in matters that directly affected his personal financial interest, and the decision to refer these findings to the Department of Justice, confirms the concerns the Oversight Committee raised last February,” said Oversight Committee Chairman Darrell Issa. “This adds to the SEC’s long list of failures in the Madoff ponzi scheme and casts continued doubt about the direction the agency is headed.”

Financial Services Committee Chairman Spencer Bachus, who initiated a letter from Committee Republicans to SEC Chairman Mary Schapiro in February about potential conflicts of interest in the Becker case, said, “This is ultimately about the integrity of the decision-making process at the SEC. The SEC is the public’s watchdog that works to hold the American businesses it oversees to the highest ethical standards. We must make sure the SEC itself is held to high ethical standards as well. The American people need to be able to trust that SEC officials are making decisions for the public good and not for personal gain.”

“The Inspector General’s report clearly identifies Chairman Schapiro’s objectionable decision not to ask Mr. Becker, who had interest in a Madoff account, to recuse himself from all Madoff-related matters or notify other members of the Commission,” saidOversight Subcommittee Chairman and Financial Services Committee Member Patrick McHenry. “The Chairman’s decision was unfair not only to the victims of Mr. Madoff, but also to American investors, issuers, and capital markets that depend on the perception that their regulators are absolutely impartial.

“Clearly, Chairman Schapiro assumed that she and her management team were above any possible reproach and needn’t worry about the federal conflict of interest law. That is an assumption no regulator should ever be allowed to make.”

“Today’s report, authored by the S.E.C.’s Inspector General, underscores the questionable decision making and processes practiced by senior S.E.C. leadership,” said Oversight and Investigations Subcommittee Chairman Randy Neugebauer. “I find it highly concerning that while the Commission holds businesses and individuals to the highest standards of ethical conduct, the Commission itself does not apply those same standards of honesty, integrity, impartiality and conduct to its own leadership. As Chairman of the House Financial Services Subcommittee on Oversight and Investigations, I will ensure the full report, and the recommendations contained within, are shown the light of day and a full examination made by members of my subcommittee.”

Click here for a copy the SEC IG’s report referring the matter to the Justice Department.

A joint subcommittee hearing between Financial Services Committee’s Oversight and Investigations Subcommittee and the Oversight and Government Reform Committee’s TARP, Financial Services, and Bailouts of the Public and Private Programs Subcommittee will take place on Thursday, September 22nd at 2 pm in room 2128 Rayburn. The hearing will stream live at oversight.house.gov andfinancialservices.house.gov. SEC Chairman Mary Schapiro, SEC IG David Kotz, and former SEC General Counsel David Becker are scheduled to testify.